We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Royal Gold, Inc. (NASDAQ:RGLD).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Royal Gold
In the last twelve months, the biggest single sale by an insider was when CFO & VP of Strategy William Heissenbuttel sold US$596k worth of shares at a price of US$91.91 per share. That means that an insider was selling shares at around the current price of US$76.62. While their view may have changed since the sale, this is not a particularly positive fact. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
In the last twelve months insiders purchased 4.50k shares for US$348k. On the other hand they divested 18.74k shares, for US$1.7m. In total, Royal Gold insiders sold more than they bought over the last year. They sold for an average price of about US$91.96. It’s not particularly great to see insiders were selling shares around current prices. Since insiders sell for many reasons, we wouldn’t put too much weight on it. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Royal Gold Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Royal Gold. In total, insiders bought US$193k worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Insider Ownership of Royal Gold
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Royal Gold insiders own about US$35m worth of shares (which is 0.7% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Royal Gold Insiders?
The recent insider purchases are heartening. But we can’t say the same for the transactions over the last 12 months. We don’t take much heart from transactions by Royal Gold insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Royal Gold may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.